QTIP Trust Planning for Same-Sex Couples

When the United States Supreme Court struck down the Defense of Marriage Act (“DOMA”) in a 2013 ruling, estate planning opportunities for same-sex couples were broadly enhanced to include tax-exempt and tax-deferred asset protections. The landmark decision overturning the DOMA redefined the entire framework of estate related provisions formally reserved for the benefit of a marital union between a man and a woman. The modification of the Act has since had important impact on the financial, retirement, and estate planning of those families as result of a universal model of marital rights.

How DOMA Reversal Changed Estate Planning

Before the Supreme Court ruling reversing DOMA, estate planning tools such as Qualified Terminable Interest Property (“QTIP”) trusts did not offer any federal estate tax benefits to same-sex couples. New York and other states recognizing same-sex marriages already allowed for estate tax benefits under law. This had important legal implications for a survivor of a married lesbian couple. Until the ruling, marital estate tax exemption did not apply to the estate income of a surviving spouse under this condition.

Benefits of the QTIP Marital Trust

The QTIP Marital trust enables the decedent to direct disposition of the remainder of trust assets in an estate after the death of a surviving spouse. This makes the QTIP trust a popular option for same-sex couples who have been legally involved in multiple marriages, and especially where children of those previous unions are named as surviving heirs. The fact that a QTIP trust allows for a decedent to protect the interests of a surviving spouse and extended family beneficiaries from contestation, creditors, or predators after death regardless of who is assigned general power of appointment.

Trust Planning for Your Family’s Future

On June 26, 2015 in Obergefell v. Hodges, No. 14–556, the U.S. Supreme Court ruled that same-sex marriage applies to all states of the union. For same-sex couples in New York and elsewhere, disposition of marital property is a major life planning decision. Proper selection of fiduciaries in planning an estate with a QTIP trust will ensure that heirs and beneficiaries are protected from probate proceedings or worse. A qualified attorney experienced in counseling an estate planning client will assist in investment advisory of gifts to and distributions according to an estate creator’s interests.

Contact a licensed New York attorney at law experienced in the estate law formation of QTIP trust entities as part of a last will and testament.

Estate Law Attorney Practice

Ettinger Law Firm is a licensed New York attorney practice specializing in estate planning and probate litigation. Contact Ettinger Law Firm to schedule a consultation about the tax-deferral and estate planning benefits of a Qualified Terminable Interest Property trust.  

See Related Blog Posts

Estate Planning Concerns for Same-Sex Couples

 

Many Same-Sex Couples Still Need to Update Plans Post-DOMA

 

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